Mixed Bag

A Question of Numbers
By ROGER LOWENSTEIN
Published: January 16, 2005

An excellent Read in the NYTIMES Sunday Magazine. Relevant Quotes:

The actuarial view is that the system is probably in need of a small adjustment of the sort that Congress has approved in the past. But there is a strong argument, which the agency acknowledges as a possibility, that the system is solvent as is.

If its more optimistic projection turns out to be correct, then there will be no need for any benefit cuts or payroll-tax increases over the full 75 years

Over a recent 10-year span, the trustees' intermediate guesses turned out to be quite pessimistic. Its optimistic guesses were dead on, and its pessimistic case -- sort of a doomsday situation -- was wildly inaccurate

The basic point here is that tiny swings in any of these or other factors could improve -- or worsen -- the program's balances. If a few of them lean in the direction of the optimistic forecast, the trust fund will cover benefits through 2080, or close to it. Would such a program, which appears to be solvent or near solvent until the limit of what is humanly forecastable, be improved upon by the various schemes for privatization?

George W. Bush is artificially creating a Crisis for his own political agenda, one which could only worsen the lot of the Social Security system. It is this Author's estimate that the American Taxpayer will have to pay an additional $1.70 in long-term Benefits, for every $1 allowed to enter Private Accounts; the rugged Independents will change their tune when they reach Age 65 without the necessary financial Reserves to sustain a viable monthly Income.
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Worrisome details also bother in other areas. The Numbers come out later this Week, and it is getting a little late in the ''Recovery". We need get below 300,000 New Unemployment Claims, or above 200,000 New Jobs created. Remember We are destined for an new Graduating Class from Colleges and High Schools in May.

The International Front also is looking bad. The Chinese Banking scandals are not in themselves a big deal. The number of different scandals, plus the huge numbers of banking officials involved, begins to imply that the terrific Growth of the Chinese economy may possess many elements of a Ponzie game. D. Boerse attempting to buy the London Exchange also brings the threat of monopoly management of Trading practice. Action should be taken to insure that no American exchanges can be purchased by foreign Exchange interests. The Beige Book needs to show actual gain, else the lousy P/E ratios are going to take effect; this in the face of the Funds having a projected net Outflow for January. lgl